Lincare reports earnings boost

CLEARWATER, Fla. - Lincare on April 18 reported net revenues of $431.6 million for the first quarter of 2011, a 5.2% increase compared to net revenues of $410 million for the same period last year.

It reported net income of $46.4 million for the first quarter of 2011 vs. $43.6 million for the same period last year, a 6.3% increase.

Lincare credited the boost to 9.3% internal and acquisition growth offset by a 4.1% negative impact from $16.7 million of Medicare payment changes. Part of that acquisition growth: On Feb. 21, Lincare bought a specialty pharmacy business with annual revenues of about $82 million.

Analysts speculate that Lincare is diversifying its product mix to ensure future growth in the face of continued cuts to Medicare payments.

“We continue to believe that Lincare will be a long-term winner in the oxygen space,” wrote Oppenheimer analyst Michael Wiederhorn in a research note, according to The Associated Press. “However, rates are likely to remain pressured, so the move to diversify into new businesses could set the company up for its next leg of growth.”

Also in Lincare's earnings report: The provider generated $81.3 million of cash from operating activities during the first quarter of 2011 and invested $24 million in net capital expenditures and $20.6 million in business acquisitions. As of March 31, 2011, total long-term obligations were $509.2 million, and cash and investments were $173.6 million.

“We are pleased with Lincare's operating and financial performance in the first quarter of 2011,” stated CEO John Byrnes in a release. “As the year progresses, we look forward to building on our market share gains and driving earnings growth through organic expansion, selective acquisitions and other strategic opportunities.”

Lincare provides services and equipment to more than 785,000 customers in 48 states through 1,093 local centers.